I'm still exploring, but I don't think this is an issue with VC or the Virus audio drivers.
All of my plugins in Ableton are sluggish including my UAD plugs and Ozone. I tried running 8 in XP Compatibility mode even. I also had the same issues when running in DX/MME mode for the computer sound card.
Still doing more testing... I want to double check and maker sure all the drivers are correct for my display adapter and chipset. Win7
appeared to set this all up for me. I have a hunch it might be a display driver issue.
Edit: After updating bios, display drivers, and turning off AERO, I was unable to get it to work.
I tried turning off Multiprocessor support. That didn't do anything to help.
Turning off AERO helped a little. It appears that this is an ableton issue. After some searching, I found that others have experienced this as well
http://www.psymusic.co.uk/forum/showthread.php?t=72374
Although there are plenty of reports out there of ableton running smoothly on win7. looks like with this configuration at this time, it's not going to work.